Home Ownership & Mortgages at Credit Unions

Buying a home is probably the largest financial decision you'll ever make. And yet most people spend more time researching a car purchase than a mortgage. This is the thing worth slowing down on.

Buying vs. Renting — The Honest Version

You've probably heard "buying is always better than renting" — which is not actually true. It depends on how long you plan to stay, what the local market is doing, and what you'd do with the money otherwise.

The general rule: if you're staying for 5+ years, buying usually makes financial sense. Shorter than that, the transaction costs (closing costs, agent fees, moving costs) often eat the gains. The New York Times rent-vs-buy calculator is worth five minutes of your time before you decide.

What buying gives you: equity that grows over time, stable payments, tax benefits, freedom to modify your home.
What it costs you: mobility, full responsibility for repairs, property taxes, the risk of a down market when you need to sell.

Fixed vs. Adjustable Rate Mortgages

Fixed-rate: Your interest rate never changes. Your principal and interest payment is the same in month 1 and month 360. Predictable, stable, the most popular choice — especially when rates are low. A 30-year fixed is the standard; a 15-year fixed costs more monthly but saves dramatically in total interest.

Example: $300,000 mortgage at 6.5%. 30-year fixed: $1,896/month, $382,000 in total interest. 15-year fixed: $2,613/month, $170,000 in total interest. Same loan, $212,000 difference in total cost.

Adjustable-rate (ARM): Fixed for an initial period (5, 7, or 10 years), then adjusts periodically based on a market index. Initial rate is usually lower. Makes sense if you're confident you'll sell or refinance before the adjustment kicks in — and comfortable with the risk if you don't.

Shopping for a Mortgage — Comparison Matters More Than You Think

A 0.5% difference in mortgage rate on a $300,000 loan over 30 years is roughly $30,000 in total interest. Get quotes from multiple lenders — your credit union, a bank, and an online lender at minimum. They're competing for your business. The CFPB's loan estimate form makes it easy to compare apples to apples.

Home Equity Loans & HELOCs

Once you've built equity in your home, you can borrow against it. Two main options:

• Home equity loan: Lump sum, fixed rate, fixed term. Like a second mortgage. Good for a specific large expense — renovation, debt consolidation.
• HELOC (Home Equity Line of Credit): Revolving credit line secured by your home. Draw what you need, when you need it. Good for ongoing expenses with uncertain costs.

Both use your home as collateral. If you can't repay, the lender can foreclose. Use these carefully.

The Fair Housing Act — Know Your Rights

Federal law prohibits discrimination in mortgage lending based on race, color, national origin, religion, sex, familial status, or disability. This applies to credit unions and all other lenders. If you believe you were treated differently because of any of these factors, you can file a complaint with HUD at hud.gov.

Budget for More Than the Mortgage Payment

First-time buyers often underestimate total ownership costs. Before you commit, make sure you've factored in: property taxes, homeowners insurance, HOA fees if applicable, and maintenance. A commonly used estimate for maintenance is 1% of home value per year — so $3,000/year on a $300,000 home. Some years it's nothing; some years it's the roof.